Pandemic slashes CEO pay rises, report reveals
Covid led to cuts, but the heads of the nation’s top 50 companies still took home a median wage of more than $5m.
The nation’s CEOs, like almost everyone else, aren’t getting pay rises like they used to, a pay report has revealed.
The data from a major survey of CEO, directors and senior management pay packets reveals Covid-19 has snipped pay rises to half those of the year before.
The Executive Remuneration Report, released by Aon and the Governance Institute of Australia, shows only 25 per cent of the nation’s most senior execs received a pay rise in 2020. This was well down on the 53 per cent who took a pay bump in 2019.
The data, drawn from annual reports of ASX 300 organisations on top of 113 participating organisations, also finds that for those who did get a pay rise, the size of the increase was down on the year earlier, at just 1.4 per cent.
That is compared to the 2 per cent pay rises enjoyed by the C-suite in 2019.
The report finds median remuneration for CEOs of the ASX 50 stood at $5.27m. The figure for chief executives in the ASX 50-100 was a median $3.47m.
NAB chief executive Ross McEwan, who took a pay cut in 2020, reportedly took home $2.42m.
The remuneration report also shows bonuses were scarcer, with a 10 per cent fall in the number of ASX 300 companies handing out a short-term incentive in 2020. Still, 64 per cent of executives took home a short-term bonus last year.
Aon Reward Solutions principal Dawson Wang said the data suggested the remuneration environment “can be best described as stagnant”.
“It seems that uncertainty driven by Covid-19 at the beginning of the 2020-21 financial year led many companies to hold salaries or defer the timing of the increase,” he said.
“It will be interesting to see the flow-on effect and impact on executive movement as the economy continues to rise above pre-pandemic levels and confidence returns.”
Governance Institute of Australia CEO Megan Motto said the report highlighted the “hot issue” of executive pay.
“What we’re seeing here is that board and executive teams have been responsive to the circumstances at hand and have appreciated it in the face of economic uncertainty,” Ms Motto said.
“The pain will be evenly spread. They have taken decisions to understand, appreciate and apply those lessons.”
Given the data reflected pay conditions for the C-suite last year, Ms Motto said she was curious to see how 2021 played out.
“It depends on the long-term economic outlook and lifting our productivity and growth overall,” she said.
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